Recency Bias

Recency bias is where a person chooses or remembers something new or more recent than a choice or memory that happened some time before. More recent things stay fresher in your mind, and because these memories are more easily recalled, this can really affect your decision-making.

In the stock market, economists know that people are unconsciously biased by the last movement or price of stocks before deciding when or when not to invest. This is another reason that if stocks are continuing to go up, some people continue investing until the bubble bursts. They’re not analysing fundamentals or long-term trends. They’re just reacting to the most recent data point.

Research shows this clearly. Investors who experience recent gains become more risk-seeking, while those who experience recent losses become more risk-averse (Barberis et al., 2001). It’s not rational, but it’s predictable. The most recent experience weighs far more heavily in decision-making than it should.

If you’ve ever watched a film, you’re more likely to remember the end. Directors know this. That’s why they put so much effort into endings. They know that’s what you’ll take away. The entire two hours gets compressed in your memory into the feeling you had during the final fifteen minutes.

As an interviewer, you remember the last candidates in interviews more clearly than the ones earlier in the day. If you’re one of those interview candidates, always ending each answer with something positive will also influence the interviewer’s perception of you in your favour. This is recency bias in action. The last thing they hear from you is the thing that sticks — though it’s worth remembering the first thing you say sticks too, and it’s the middle of your answers where you’re most likely to be forgotten.

More recent things are the things that stick in our heads, and these have a really strong influence on our beliefs and the decisions we make. I see patients blaming the most recent medication for all of their side effects, or the last intervention in their medical care as the reason for their illness in the first place. They ignore the decades of smoking, drinking, and sitting on the sofa. They focus on the thing that happened most recently, even if it’s completely unrelated to their problem.

Let me tell you about a patient I’ll call Michael, a composite of several people I’ve seen with this pattern. He came to see me convinced that his new blood pressure medication was causing him to feel exhausted. When I took a proper history, I discovered he’d been feeling exhausted for months before starting the medication. His job was incredibly stressful, he was sleeping poorly, he’d gained weight, and he wasn’t exercising. But because the medication was the most recent change, he’d decided it must be the cause.

We adjusted his lifestyle instead of stopping the medication. Over the following few months, his energy improved. The medication wasn’t the problem. His recency bias had convinced him it was, simply because it was the most recent thing that had changed.

Recency bias also shows up, often gently, around bereavement. The final weeks of an illness, or the last difficult conversation, can crowd out decades of good memory, so that the relationship gets compressed into those final hard moments. This is a common and entirely understandable experience rather than a fault in how you’re grieving, and it doesn’t mean you have to let go of the person to feel better — for most people, keeping a continuing relationship with someone’s memory is a normal and healthy part of moving forward. What helps is deliberately widening the picture: remembering the person across the whole relationship, not just at the end. Grief that stays overwhelming and doesn’t ease with time is common, treatable, and worth discussing with your GP.

Recency bias can affect us all. When was the last time something went wrong? When did you have a bad experience? It’s all too easy to let that bad event affect you more than it should, and it can prevent you from doing what you really need to do again in the future.

Have a bad event, become anxious about that event happening again, and your behaviour can shift towards avoidance. Then, by stopping doing the things in life you normally should be doing, you may only be a few steps away from withdrawing from life more broadly. The walls start closing in, not because of what’s happening, but because of what happened most recently.

Let me give you a real example. You give a presentation at work. It doesn’t go well. Maybe you stumbled over your words, or someone asked a question you couldn’t answer, or your technology failed. Nothing catastrophic, just awkward and uncomfortable. That becomes your most recent memory of public speaking. Now every time you’re asked to present, that memory comes flooding back. You start avoiding presentations. Your career suffers. All because of one recent bad experience.

The rational thing would be to remember all the presentations you’ve given. Some were great, most were fine, one was awkward. But recency bias doesn’t work rationally. The most recent experience, especially if it was emotionally charged, becomes disproportionately important in your decision-making.

Research on the recency effect shows that items at the end of a list are recalled more easily than items in the middle — and, just as importantly, items at the beginning are recalled more easily too (Murdock, 1962). What happened most recently is what you remember most clearly, but so is what happened first; it’s the middle you tend to forget, regardless of actual importance.

This creates problems in relationships too. You have a wonderful relationship with someone for years. Then you have one big argument. That argument, being most recent, colours everything. Suddenly you’re questioning the entire relationship based on one recent event. You forget the hundreds of good days and focus on the one bad one.

Or consider job hunting. You have ten interviews. Nine go reasonably well. One goes terribly. Which one do you remember most clearly? The terrible one, because it was most recent. Now you’re convinced you’re terrible at interviews, based on a sample size of one recent data point, ignoring the other nine that suggest something completely different.

The way to combat recency bias is to actively remind yourself of the full picture. Don’t let the most recent event define everything. When making a decision, force yourself to consider a longer timeframe. What happened over the last week? The last month? The last year? Don’t let today’s experience override everything that came before.

In medical practice, I see this constantly. A patient has a symptom. I prescribe treatment. The symptom gets better, then worse again six months later. The patient is convinced the treatment has stopped working, that they’ve developed resistance, that something’s changed. Often, the symptom is just fluctuating naturally, like it always has. But because the most recent experience was the symptom returning, they’ve forgotten the six months of improvement.

Bad things happen in life. That’s unavoidable. But don’t let the most recent bad thing define your future. The longer you let that recent bad experience sit there as your most recent memory, the more it solidifies as your reference point for the future.

Further reading

1. Barberis, N., Huang, M., & Santos, T. (2001). Prospect theory and asset prices. The Quarterly Journal of Economics, 116(1), 1–53.
2. Murdock, B. B. (1962). The serial position effect of free recall. Journal of Experimental Psychology, 64(5), 482–488.
3. Bonanno, G. A. (2009). The Other Side of Sadness: What the New Science of Bereavement Tells Us About Life After Loss. Basic Books.
4. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124–1131.
5. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.